ANNOUNCEMENT 07 Nov 2013
November 7th, 2013 - The Chinese government published an update to its policy which guarantees domestic importers a certain price on natural gas.
NUMBER OF INTERVENTIONS
PRC Central People's Government, November 7th, 2013. (财关税〔2013〕74号)
On November 7th, 2013, the Chinese State Administration of Taxation altered the target domestic sales price for imported natural gas. To incentivise gas imports, the Chinese government rebates the VAT on imported natural gas when the import price exceeds the desired domestic price.
Previously, the fixed domestic price was determined on a case-by-case basis for specified importers using their average prices recorded over each quarterly period. With this announcement, the price is fixed at a certain level. Due to the lack of concrete comparison, the intervention is classified as amber.
Through its decree, the Chinese government altered the sales price of natural gas as follows:
From July 2013:
The measure is effective retroactively for the relevant periods. Excess VAT paid on prior imports will be credited accordingly.
In addition to the above, the Chinese natural gas rebate policy simultaneously consitutes a discriminatory treatment of unknown users of the natural gas imported through the scheme, as imported LNG will benefit from the rebate.
Again, since this does represent a change, but direct comparison to the previous state of affairs is not possible, this intervention is classified as amber.